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Revenue (Notes) | 6 Months Ended
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Jun. 30, 2019
Revenue from Contract with Customer [Abstract] |
Revenue from Contract with Customer | REVENUE Revenue Recognition Products Substantially all of Corteva's revenue is derived from product sales. Product sales consist of sales of Corteva's products to farmers, distributors, and manufacturers. Corteva considers purchase orders, which in some cases are governed by master supply agreements, to be a contract with a customer. Contracts with customers are considered to be short-term when the time between order confirmation and satisfaction of the performance obligations is equal to or less than one year. However, the company has some long-term contracts which can span multiple years. Licenses of Intellectual Property Corteva enters into licensing arrangements with customers under which it licenses its intellectual property. Revenue from the majority of intellectual property licenses is derived from sales-based royalties. Revenue for licensing agreements that contain sales-based royalties is recognized at the later of (i) when the subsequent sale occurs or (ii) when the performance obligation to which some or all of the royalty has been allocated is satisfied. Remaining Performance Obligations Remaining performance obligations represent the transaction price allocated to unsatisfied or partially unsatisfied performance obligations. At June 30, 2019, the company had remaining performance obligations related to material rights granted to customers for contract renewal options of $104 million ($102 million and $99 million at December 31, 2018 and June 30, 2018, respectively). The company expects revenue to be recognized for the remaining performance obligations over the next 1 year to 6 years. Contract Balances Contract liabilities primarily reflect deferred revenue from prepayments under contracts with customers where the company receives advance payments for products to be delivered in future periods. Corteva classifies deferred revenue as current or noncurrent based on the timing of when the company expects to recognize revenue. Contract assets primarily include amounts related to contractual rights to consideration for completed performance not yet invoiced. Accounts receivable are recorded when the right to consideration becomes unconditional.
Contract Balances | June 30, 2019 | December 31, 2018 | June 30, 2018
(In millions)
Accounts and notes receivable - trade 1 | $ | 6,102 |  | $ | 3,843 |  | $ | 5,886 |
Contract assets - current 2 | $ | 19 |  | $ | 18 |  | $ | 17 |
Contract assets - noncurrent 3 | $ | 48 |  | $ | 46 |  | $ | 44 |
Deferred revenue - current 4 | $ | 583 |  | $ | 2,209 |  | $ | 431 |
Deferred revenue - noncurrent 5 | $ | 118 |  | $ | 150 |  | $ | 121 |
1. | Included in accounts and notes receivable - net in the interim Condensed Consolidated Balance Sheets.
2. | Included in other current assets in the interim Condensed Consolidated Balance Sheets.
3. | Included in other assets in the interim Condensed Consolidated Balance Sheets.
4. | Included in accrued and other current liabilities in the interim Condensed Consolidated Balance Sheets.
5. | Included in other noncurrent obligations in the interim Condensed Consolidated Balance Sheets.
The change in deferred revenue from December 31, 2018 to June 30, 2019 was substantially due to the timing of seed deliveries to customers for the North America growing season. Revenue recognized during the six months ended June 30, 2019 from amounts included in deferred revenue at the beginning of the period was $1,895 million. The increase in accounts and notes receivable - trade from December 31, 2018 to June 30, 2019 was primarily due to the seasonality of the company's business. Trade receivables are at a low point at year-end and increase through the northern hemisphere selling season, reaching their peak at the end of the second quarter. Disaggregation of Revenue Corteva's operations are classified into two reportable segments: Seed and Crop Protection. The company disaggregates its revenue by major product line and geographic region, as the company believes it best depicts the nature, amount and timing of its revenue and cash flows. Net sales by major product line are included below:
| Three Months Ended June 30, | Six Months Ended June 30,
(In millions) | 2019 | 2018 | 2019 | 2018
Corn | $ | 2,309 |  | $ | 2,248 |  | $ | 3,777 |  | $ | 3,945 |
Soybean | 998 |  | 1,214 |  | 1,129 |  | 1,395 |
Other oilseeds | 200 |  | 194 |  | 425 |  | 457 |
Other | 192 |  | 208 |  | 335 |  | 368 |
Seed | 3,699 |  | 3,864 |  | 5,666 |  | 6,165 |
Herbicides | 1,044 |  | 1,068 |  | 1,815 |  | 1,931 |
Insecticides | 459 |  | 448 |  | 836 |  | 777 |
Fungicides | 302 |  | 269 |  | 522 |  | 547 |
Other | 52 |  | 82 |  | 113 |  | 105 |
Crop Protection | 1,857 |  | 1,867 |  | 3,286 |  | 3,360 |
Total | $ | 5,556 |  | $ | 5,731 |  | $ | 8,952 |  | $ | 9,525 |
Sales are attributed to geographic regions based on customer location. Net sales by geographic region and segment are included below:
Seed | Three Months Ended June 30, | Six Months Ended June 30,
(In millions) | 2019 | 2018 | 2019 | 2018
North America 1 | $ | 3,099 |  | $ | 3,279 |  | $ | 4,012 |  | $ | 4,478 |
EMEA 2 | 274 |  | 267 |  | 1,078 |  | 1,089 |
Asia Pacific | 139 |  | 147 |  | 211 |  | 220 |
Latin America | 187 |  | 171 |  | 365 |  | 378 |
Total | $ | 3,699 |  | $ | 3,864 |  | $ | 5,666 |  | $ | 6,165 |
1. | Represents U.S. & Canada.
2. | Europe, Middle East, and Africa ("EMEA").
Crop Protection | Three Months Ended June 30, | Six Months Ended June 30,
(In millions) | 2019 | 2018 | 2019 | 2018
North America | $ | 686 |  | $ | 847 |  | $ | 1,165 |  | $ | 1,419 |
EMEA | 393 |  | 420 |  | 953 |  | 994 |
Asia Pacific | 312 |  | 284 |  | 515 |  | 466 |
Latin America | 466 |  | 316 |  | 653 |  | 481 |
Total | $ | 1,857 |  | $ | 1,867 |  | $ | 3,286 |  | $ | 3,360 |

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
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